Hot investing startup Pagaya has landed a 20-year BlackRock veteran as chief investment officer

FILE PHOTO --  The company logo and trading information for BlackRock is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York, U.S., March 30, 2017. REUTERS/Brendan McDermid/File Photo

  • Ed Mallon, a former managing director at BlackRock, has joined a small asset manager as its chief investment officer. 
  • Mallon said Pagaya, the firm he joined Thursday, is at a similar inflection point as BlackRock when it was founded in the 1980s. 

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A more than 20-year veteran at the world’s largest asset manager has left to join a startup tech company. 

Ed Mallon, a former managing director overseeing opportunistic investments at BlackRock, has joined New York-based Pagaya as chief investment officer. Mallon began at the two-year-old asset manager, which oversees $200 million, on Thursday. 

Mallon started at BlackRock, which manages $6 trillion, in 1997. That was two years before the company went public, when it was still a relatively new player on Wall Street.

He began at the firm in the retail group, a small team he got to see grow and expand into new asset classes. To Mallon, Pagaya is at a similar inflection point as when BlackRock was created in the 1980s.

“Wall Street was creating complex mortgage securities and BlackRock was creating sell-side analytics for the buy-side to get a good sense of the risk and create a differentiated fixed-income product that could help them understand it,” he said in a telephone interview. 

Today, you have burgeoning online lenders like Prosper and LendingClub offering a new investment opportunity.

Pagaya recently landed $75 million in debt financing from Citigroup, to create a fund to invest in loans originated by such peer-to-peer lenders. The space has experienced significant growth, propelled by low interest rates. Pagaya uses its technology to help clients figure out the investment universe, similar to how BlackRock helped its clients figure out mortgage-backed securities. 

“Regulatory changes and new business models are emerging and these loans that used to sit on a banks balance or get bundled into securities are now readily available to be purchased,” Mallon said. 

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